Following in the footsteps of the American Arbitration Association (AAA), JAMS recently announced the creation of its own mass arbitration procedures and guidelines, designed, in part, "to facilitate the fair, expeditious, and efficient resolution of mass arbitrations."
The new guidelines will apply to any mass arbitration, defined as 75 or more similar demands for arbitration or a different amount as specified in the parties' arbitration agreement, filed against the same or related party on behalf of individual claimants represented by the same law firm or law firms acting in coordination with each other.
JAMS's new mass arbitration procedures also include certain filing requirements that must be met by a claimant, including a requirement that a sworn declaration from counsel avers that the information in each demand is true and correct to the best of counsel's knowledge. This appears to be designed to address ethical considerations raised by many respondent businesses faced with a mass arbitration.
Notably, the new rules authorize and permit the use of a process administrator, designed to "determine such preliminary and administrative matters as may be necessary to ensure the orderly and efficient resolution of the claims brought in a Mass Arbitration, consistent with the terms of the controlling agreements, procedural fairness and the integrity of the Arbitration process." This includes the power and authority to consider, among other things:
- Whether the filing requirements have been met.
- Whether any conditions precedent in the arbitration agreement have been met.
- Which arbitration demands should be included.
- Which rules apply.
- Whether to batch, consolidate, or otherwise group demands.
- Any other non-merits issues that impact case administration.
JAMS's new mass arbitration procedures also include an updated fee schedule. Under the new fee schedule, there is a non-refundable $7,500 filing fee (regardless of the number of cases), which must be paid before the process administrator will be assigned. In consumer cases, the most a consumer must pay of the initial filing fee is $2,500, with the business picking up the remainder. The updated fee schedule also calls for a case management fee in the amount of 13% of the professional fee and a single appointment fee of $2,000 (for a two-party matter) regardless of the number of cases or group of cases the arbitrator is appointed to. A process administrator will also bill in accordance with the rate reflected in their general fee schedule.
The updated rules and fee schedule appear designed to address common complaints with the mass arbitration process, including the exorbitant up-front filing fees and the inability to quickly address procedural issues at the outset and before incurring significant filing fees and costs.
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